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This is coming (or may already be available?). I'm dealing with the Western Canadian perspective BUT all the links and topics make for a general read. Warning, there's a lot to digest here.

In Canada, Shaw and Rogers are said to be looking at VPVR to foster the means for people to record what they want, when they want.

Shaw is working with VOD (Video on Demand) right now. They and Rogers are fielding questions regarding PVR and HD-PVR technology. (edit, sorry could not find a link to this but... Rogers is said to be releasing an HD-PVR for rent or purchase later this year... the SA8000HD to complement the SA8000)

Shaw has no means for its customers to digitally record shows. This is a disadvantage in their competition against the satellite providers.

Motorola is the digital set top box that is being offered through Shaw and currently they are pushing the DCT 5100 unit at $700 a crack. It does not support PVR technology.

The DCT 5200 is not supported by Shaw even though it allows for an external PVR backpack.

MORE importantly, the HD-PVRs are coming. Motorola's 6000 Series is to be released this summer. This is going to make a lot of people spend a lot of money once it becomes available in their area.

Virtual PVR has its benefits. At a cost of even $10 a month this would pale in comparison to the continued costs of upgrades to your set top. What is not clear is whether the technology that is currently in place will be seamless, reliable, user friendly, and supporting HD recording.

Would you support VPVR so long as it works or would you rather have a set top PVR?

I would never support it unless I was guaranteed that I would retain full control of my recordings. The problem with this technology is that the company can stop you from recording whatever shows they feel like, or they could force you to watch a show that you record in x amount of time before it's deleted.
If they just licensed tivo like directv I would feel better about it.

The control factor is a big sacrifice.
I'm on the fence on this at the moment. As explained by one very (exceedingly) higher up at one of the providers, the theory is that whatever you want to be recorded will be recorded.
The example give was that you pick 10 or 20 regular programs a week and they automatically record those. Specials of course can be added on an individual basis (e.g. sports, movies).
I think that it goes without saying that just like any other PVR, there will be a finite limitation to the amount of space you can use up. I doubt they would want to limit the time frame so much as GB per person.